Our Living Trust Package is more than a document called “Living Trust.” It is an entire estate planning package. Our final product is an organizer containing legal documents that meet your estate planning needs. Inside the organizer, you will find the following documents and forms:

1. Revocable Living Trust

2. Pour-Over Will

3. Durable Power of Attorney for Financial Matters.

4. Advance Health Care Directive

5. Certification of Trust

6. Memorial Plan (for you to fill out at your leisure)

7. Personal Information (for you to fill out at your leisure)

Frequently Asked Questions About Our Living Trust Package

What is a Revocable Living Trust?

Revocable Living Trust is the most commonly known type of trust. It is sometimes referred to as a living trust, a revocable inter vivos trust, or a grantor trust.

Are their other kinds of trusts?

Yes. There are other kinds of trusts such as testamentary trusts and irrevocable trusts. Testamentary trusts are trusts which are set forth in your will and which, therefore, cannot provide for any management of your assets during your lifetime. Testamentary trusts can, however, provide for young children and others who need management of their assets after your death.

Irrevocable trusts are trusts that are not amendable or revocable by you, such as irrevocable life insurance trusts, irrevocable trusts for children, and charitable trusts. You should consult a lawyer before you have an irrevocable trust established.

What is the purpose of a living trust?

A revocable living trust is the most commonly used method to give your loved ones your assets when you pass away without going through probate. During your lifetime, you are the trustor and trustee of this trust. This means that you remain in control of your assets. You may manage the assets anyway you like as long as you are alive and with a sound mind.

When you pass away or become incapacitated, the successor of your choice (called Successor Trustee) can assume responsibility for your assets and manage them for your benefit without direct court intervention. At your death, the trustee will inventory your assets, pay debts and taxes, and distribute your assets as you have directed in the trust. At this point, the trustee’s role is similar to an executor of your will.

What is probate?

Probate is the court-supervised process regarding the transfer of your assets at your death to the beneficiaries you named in your will. If you do not have a will, the probate proceeding will help determine who your heirs are and what property shall be given to them. At the beginning of a probate administration, a petition is filed with the court, usually by the person or institution named in your will as executor. After notice is given, and a hearing is held, your will is admitted to probate and an executor is appointed. If you die without a will, your estate is still subject to probate court administration and the person appointed by the court to handle your estate is known as the "administrator."

Once your assets are submitted for probate, your estate plan and the value of your assets become a public record. Also, because lawyer's fees and executor's commissions are based upon a statutory fee schedule, the expenses may be greater than the expenses incurred by a comparable estate managed and distributed under a living trust. In addition, distributions based on a living trust can be made more quickly than the one based on a probate proceeding.

May I change my living trust or even revoke it any time I want?

Yes. A living trust may be amended or revoked by the person who created it. (This person is commonly known as a "trustor," "grantor" or "settlor". In our trust documents, we use “trustor”.) The trustor may do so at any time during the trustor's lifetime, as long as the trustor is mentally competent.

Do I need a Living Trust?

It depends. If the value of your assets is high, particularly if they include real estate, a living trust might be for you. If you are a young, healthy person with few assets, then you probably do not need a living trust right now. Our experience is that a lot of our clients have their estate planning documents set up before they purchase a house or make a major investment decision. Many of our clients have a trust set up to benefit their children in case of a sudden illness or death.

Who should I choose as the Successor-Trustee of my living trust?

The Successor-Trustee you appoint will act in your place. This person will have considerable authority and responsibility in managing the trust assets. The Successor-Trustee is not under direct court supervision, and will assume the responsibility when you become incapacitated, or at your death.

A trustee may be a spouse, adult children, other relatives, family friends, business associates or a professional fiduciary, such as a bank or trust company. You may also appoint two or more persons as co-successor-trustees. The successor trustee of your choice must be an adult.

You might want to ask yourself a few questions before you pick the successor-trustee(s). The following are a few examples: Will the appointment of one of your adult children cause undue stress in his or her relations with siblings? What conflicts of interest could the decision possibly create? Will the person named as successor trustee have the time, organizational ability, and experience to do the job effectively?

Is a trust required to file income tax returns?

As long as you are the trustee, no income tax returns are required for the living trust. The taxpayer identification number for the trust is your Social Security number, and all income and deductions related to the assets held in the trust are reportable on your individual income tax returns.

Upon your death, information returns must be filed by the successor-trustee, reporting all of the income and deductions relating to the trust assets to the IRS and attributing them to your personal return; no additional tax is assessed by reason of the living trust. After your death, the income taxation of the living trust is similar to that applicable to a probate estate. Please consult with your CPA if you have questions regarding this particular subject.

Is my living trust in effect the moment I receive the estate planning package?

No. Your documents need to be notarized and/or witnessed in order for them to be in effect. Certain documents, such as Durable Power of Attorney for Financial Matters, need to be recorded with your local county recorder’s office. Along with every package, you will receive a check list indicating the steps you need to take to insure the legally binding effect of your documents.

What do I do after a revocable living trust is created?

A trust does not automatically take effect once it is signed and notarized. You must take a few steps to “fund” the trust. Property owned under your name must be transferred into the trust. If you have real property, you must execute deeds transferring the property from your personal name into your trust. Many states have real estate tax exemption statutes for trust transfers, so be sure to check with the county assessor’s office of the county where the property is located and obtain a tax exemption form. Make sure that you submit the tax exemption form, if required, when you have the deed recorded.

For bank accounts and investment accounts, please contact your financial institutions and have them transfer the accounts for you. Many financial institutions have their own in-house rules regarding transfers, so be sure to contact them individually. The Certification of Trust we prepare for you is, in most cases, sufficient to meet the requirements of a transfer.

What is children’s trust?

If you have beneficiaries under 18 and you would like the trust to take care of them financially until they reach a certain age, you may choose to have a children’s trust incorporated in your revocable living trust.

Upon your death, a children’s trust will be created for each of the beneficiaries under 18. Funds generated by the trust will be used to provide the child with basic needs, such as food, shelter, health care and education. The child will receive his/her share when the child reaches 18, or an age of your choice. Some parents and grandparents worry that a young beneficiary might not have the maturity to manage the “pot of gold” he/she has suddenly received. If age is a concern, you may choose to have the child’s share stay in the trust, managed by your successor-trustee, and be given to the child at any age between 18 and 35. The child can still receive the benefit of the trust funding and will receive the entire balance of the share when the child is old enough to be on his/her own.

Will [FAQ]

What Is a Will?

A will is a legal document which is effective only at your death to name individuals (or charitable organizations) to receive your assets upon your death. It is the most traditionally known document for estate planning.

In your will, you will nominate an executor. The executor will file the probate petition with the probate court. Once appointed and supervised by the probate court, the executor will manage your estate, pay debts and expenses, pay taxes, and distribute your estate based on your will

You may nominate the guardians of the person and estate of your minor children, to care and provide for your minor children

If I Have a Living Trust, Do I Still Need a Will?

Yes. Your will affects any assets which, for one reason or another, were held in your name alone at your death and not in your living trust or in some other form of ownership. With the living trust, your will usually contains, as its primary provision for the distribution of your estate, a "pour over" provision, which simply directs that any assets held in your name be transferred at your death to your living trust.

Pour-over Will

A "pour-over" will is necessary to distribute any property that is acquired in the name of the grantor after the living trust was established, or any property that was not transferred into the trust in the first place.

The use of a "pour-over" will, together with a living trust ensures that assets not held in trust will be distributed in accordance with the wishes of the deceased, and not by the laws of intestacy.

A "pour-over" will, like any other will, must go through probate if the decedent dies owning assets which must pass through the will.

Now that I have a trust, do I still need to designate beneficiaries to receive my assets in the pour-over will?

Yes. If you have assets not covered in the trust, including items of personal effects such as fine china, personal collections, inexpensive jewelry and any miscellaneous items, then it is recommended that you designate someone to receive these items.

Nomination of Guardians

A minor child is a child under 18 years old. A minor child is legally considered as unable to care for himself or herself if both parents are deceased. Therefore, it is a good idea to nominate a guardian of the person of your minor children to supervise that child and be responsible for his or her care until the child is 18 years old.

A minor is also legally considered as unable to manage his or her own property. Assets transferred outright to a minor must be held for the minor's benefit by a guardian of the child's estate until the child turns 18.

Does a will cover everything I own?

No. Generally speaking, your will affects only those assets which are in your name alone at your death. Assets with a designated beneficiary, such as insurance policy and retirement accounts will be dealt with separately upon your death. Your will also does not cover the assets placed in a living trust or property you own jointly with others.

Can I change my will?

Your will can be changed and amended through a "codicil," which should be properly signed and witnessed. You may not change the will by crossing out words or sentences or by making any notes or written corrections on it.

May I leave a child out of my will?

Yes. It is your money and you decide who the money should go to.

Durable Power of Attorney (For Financial Matters) [FAQ]

What's a Power of Attorney?

A power of attorney is a legal document delegating legal authority to another person. The person who signs (executes) a power of attorney is called the principal. The power of attorney gives legal authority to another person (called an agent or Attorney-in-Fact) to make property, financial and other legal decisions for the Principal.

The power of attorney is frequently used to help in the event of a principal's illness or disability, or in legal transactions where the principal cannot be present to sign necessary legal documents.

Are there different types of Powers of Attorney?

Yes. There are different types of Powers of Attorney. For example, a “nondurable (or general) power of attorney” takes effect immediately. It remains in effect until it is revoked by the principal, or until the principal becomes mentally incompetent or dies.

A durable power of attorney enables the agent to act for the principal after the principal is not mentally competent or physically able to make decisions. It is effective until it is revoked by the principal, or until the principal's death. There is a durable power of attorney included in our estate planning package.

What kind of power does an agent get from a power of attorney?

A power of attorney can allow the agent to buy or sell your real estate, manage your property, write checks to pay bills, invest your money, or make a donation.

Can a power of attorney grant an agent the authority to make medical decisions for me?

No.

Who should I appoint as my Agent?

You should never appoint someone you do not trust fully as your agent. A trusted family member or friend, or a professional with a good reputation would be a good choice.

Can I appoint more than one agent in a power of attorney?

Yes. You may appoint multiple agents. If you appoint two or more agents, you must decide whether they must act together as co-agents or separately as back-ups.

What are an agent’s duties?

An agent is obligated to act in the best interests of you as the principal. He or she must safeguard your property. Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into their possession.

Choosing a Physician

In our Durable Power of Attorney for Financial Matters we provide you with an option to choose two physicians who will examine your physical condition and pronounce whether you are mentally competent to make decisions. You may also choose two physicians to help determine that you are no longer incapacitated. If you have been seeing a doctor for years, and you trust his judgment regarding whether you are deemed incapacitated, you may put him on the list. Please make sure the doctor can be located when the need arises. If you do not have such preference, you may check the box indicating “any treating physician.”

May I revoke my Power of Attorney?

Yes. You may revoke your power of attorney at any time. Once revoked, you must notify your agent(s) regarding your decision. You should also notify your bank or other financial institution that the power of attorney has been revoked.

You should file a copy of the revocation with the county clerk/recorder if your power of attorney has been filed in the clerk's office.

Do I need to have my signature witnessed on a Power of Attorney?

Yes. Your signature on the power of attorney must be notarized by a Notary Public. It is also recommended that you have this document recorded with your local clerk/recorder.

Conservatorship

A court controlled program where a conservator is appointed by the court to manage the monetary affairs of a person(s) who is unable to manage his/her own affairs.

Advance Health Care Directive [FAQ]

What is Advance Health Care Directive?

Advance Health Care Directive is a legal document which allows you to appoint an agent to make health care decisions for you in the event that you become incapacitated. It also allows you to give instructions regarding health care treatments.

Appointing a health care agent

The first part of the Advance Health Care Directive is called “Durable Power of Attorney for Health Care.” This part of the document allows you to appoint an agent, who will have the legal authority to make health care decisions for you if you are no longer able to speak for yourself.

Living Will

This part of the Advance Health Care Directive allows you to create a Living Will, a specific instruction for your future health care in case you have become incapacitated, such as in a vegetative state, etc.

Who should I pick as my agent for health care decisions?

The person you choose should be someone you can trust, someone who knows your wishes, values, and beliefs. In addition, your agent should be willing to make health care decisions based upon your best interests.

Can I appoint more than one person as my agents?

Yes. In case something should happen to the first agent you choose, it is a good idea to choose an alternate agent as a back-up. You may also appoint more than one agent (called co-agents) to make decisions for you together.

Who is qualified as an agent?

The following people may not qualify to act as your agent:

• A child under 18.
• Your health care provider,
• An employee of the health care provider, unless this person is a relative of yours
• Your residential care provider
• An employee of your residential care provider unless this person is your relative.

Your agent will not be responsible for your medical bills, unless that person is already legally responsible for your debts

Can my agent named in Advance Health Care Directive also act as my agent to deal with my finances?

No. You need other documents, such as a Durable Power of Attorney for Financial Matters, to give your agent the authority to do so.

Conservator

A person appointed to be legally responsible for the management of property and money belonging to a minor or incompetent person. The conservator may act as the guardian or the guardian may be a separate person and the conservator will just work with the guardian.

May I revoke the Advance Health Care Directive?

Yes. You may change or revoke your Advance Health Care Directive at any time. Please make sure to notify the agent, your health care provider and your family once the document is revoked.

Certification of Trust

Certification of Trust is a statement by the trustor(s) that a trust has been created. This useful mini document comes in handy when it comes to having financial accounts transferred from your personal name into your living trust. Many financial institutions require you to show proof that a trust is established. Presenting the Certification of Trust serves this purpose without having to show them the entire trust, which includes the details regarding your trust assets and how you would like the assets distributed.

Memorial Plan

This is a form for you to fill out at any time. By filling out the form, you provide the executor of your will, as well as your loved ones, with instructions regarding how you would like things done after you pass away, such as burial and funeral arrangements.

Personal Information

This is a form for you to fill out at any time. The form will serve as a “road map” to your assets and all other legal documents. Upon your death, your successor trustee and/or executor will need to inventory your assets. This form tells them where to go to find those assets.